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Full-year results 2009 Investors’ Presentation
Zurich, 30 March 2010
Full-year results 2009: Investors' Presentation 2
Agenda
Overview Bruno PfisterFinancial results and Thomas Buess MILESTONE update
Outlook Bruno Pfister
Full-year results 2009: Investors' Presentation 3
Highlights: Key performance metrics improved
Net result from continuing operations at CHF 324 m up from CHF - 1.1 bn in 2008
Premium growth at 12% in local currency due to regained momentum
Net investment result improved to 3.9% from 0.3% in 2008
Group solvency improved to 164% (FY 2008: 158%)
Operating expenses reduced by 10%
Shift to modern and risk products progressing well and increase in volumes sold through AWD
AWD with underlying profitability since Q3 2009
VNB increased slightly by CHF 4 m to CHF 123 m, while new business margin decreased to 0.9% from 1.1% in 2008
AWD local EBIT loss of EUR 41 m because of restructuring costs and one-offs
Return on equity at 4.0%
Full-year results 2009: Investors' Presentation 4
2009 results
Net profit (cont. operations) CHF 324 million +CHF 1.5 bn
GWP incl. PHD (currency adjusted) CHF 20.2 billion +12%
Result from operations CHF 562 million +CHF 1.4 bn
Shareholders’ equity CHF 7.2 billion +9%
Dividend (proposed) CHF 2.40 -CHF 2.60
New business margin (% PVNBP) 0.9% -0.2 ppts
Group solvency 164% +6 ppts
FY 2009 vs FY 2008
Full-year results 2009: Investors' Presentation 5
Agenda
Overview Bruno Pfister
Financial results and Thomas Buess MILESTONE updateOutlook Bruno Pfister
Full-year results 2009: Investors' Presentation 6
1) Diluted, based on 31 706 425 shares in 2009 and 32 169 248 shares in 2008
CHF million (IFRS basis)
Income statement
Net profitNet result from discontinued operations
Earnings per share (in CHF) 1)
Earnings per share from continuing operations (in CHF) 1)
Net result from continuing operations
Gross written premiums, fees and deposits receivedCommission income
Continuing operations
3451 488
10.88-35.37
-1 143
18 515950
6Share of results of associates -149
277-47
8.8310.33
Financial result for own risk 388 4 570
324
Operating expense -3 319 -3 478Policyholder participation 429 -1 539Net insurance benefits and claims -12 915 -11 884
20 219934
Income tax expense 29 -103
FY 2009FY 2008
Result from operations -842Borrowing costs -181 -141
562
Full-year results 2009: Investors' Presentation 7
CHF million 1) (IFRS basis)
-95324
277
Net result
Net result continuing operations
Discontinued operations
Net result continuing operations,
excl. one-offs
+47
Gains from hybrid
repurchase
+49
335
Restructuring costs CH,
DE, AWD 2)
Major one-off effects in the 2009 result
CEAT &
MLP sale
+7+50
One-offsAWD 2)
1) After policyholder participation and tax2) Further details on AWD’s one-off and restructuring costs provided on slide 14
Full-year results 2009: Investors' Presentation 8
CHF million (IFRS basis, MCEV)
Business review Insurance Switzerland
Operating expense adjusted
GWP incl. PHD
Segment result
New business volume (PVNBP)
New business margin (% PVNBP)
MCEV
FY 2009
-513
7 518
467
3 396
0.3%
1 513
FY 2008
-596
8 172
-748
3 824
1.2%
1 201
Change
-14%
-8%
n.a.
-11%
-0.9 ppts
+26% Better economic environment and normalisation of credit spreads
GL: Excl. one-off in PY (-3%) slightly below market, lower lapse ratesIL: +2%, in line with market; higher new business
Impact of cost savings initiatives
Higher investment income and cost savings
+15% after premium recognition adjustment for 2008
Influenced by elimination of liquidity premiums, lower interest rates and higher volatilities
Full-year results 2009: Investors' Presentation 9
EUR million (IFRS basis, MCEV)
Business review Insurance France
Operating expense adjusted
GWP incl. PHD
Segment result
New business margin (% PVNBP)
MCEV
FY 2009
-305
3 507
106
0.9%
1 298
FY 2008
-299
3 630
24
1.3%
1 128
Change
+2%
-3%
+342%
-0.4 ppts
+15%
3 1352 526 +24%New business volume (PVNBP)
Mainly driven by normalisation of credit spreads and equity performance
+5% if one-off in 2008 is excluded (market +9%)
Flat costs despite underlying growth
Higher investment income and gain on CEAT sale
Major effect from change to MCEV for health business
Change to MCEV for health business and less favourable business mix
Full-year results 2009: Investors' Presentation 10
EUR million (IFRS basis, MCEV)
Business review Insurance Germany
Operating expense adjusted
GWP incl. PHD
Segment result
New business margin (% PVNBP)
MCEV
FY 2009
-117
1 436
61
1.3%
339
FY 2008
-114
1 245
19
0.9%
352
Change
+3%
+15%
+221%
+0.4 ppts
-4%
1) Supplementary disability insurance 2) Without capitalisation product
1 069909 +18%New business volume (PVNBP)
Elimination of liquidity premium not compensated by decrease of credit spreads
Above-market growth of +7% mainly due to capitalisation product and BUZ 1)
Extended project portfolio to implement strategic initiatives
Strongly improved financial result; positive one-off tax effect of ~EUR 20 m
Higher volumes with risk products 2)
Risk products with higher margins
Full-year results 2009: Investors' Presentation 11
CHF million (IFRS basis, MCEV)
Business review Insurance Other 1)
Operating expense adjusted
GWP incl. PHD
Segment result
New business margin 2)
(% PVNBP)
MCEV 2)
FY 2009
-101
5 263
-43
1.0%
190
FY 2008
-87
2 639
-36
0.6%
161
Change
+16%
+99%
-19%
+0.4 ppts
+18%
1) “Insurance Other” consists of Private Placement Life Insurance (PPLI), Corporate Solutions, Swiss Life Products and Payment Protection Insurance (PPI)2) Includes only PPLI and Corporate Solutions
4 7551 987 +139%New business volume (PVNBP 2))
Due to value of new business
Strong growth mainly due to PPLI and Corporate Solutions
Investments in growth and product platforms
Strong growth, while cost base remained stable in PPLI
Due to new business of PPLI
Driven by volume effect
Full-year results 2009: Investors' Presentation 12
CHF million (IFRS basis)
Business review Investment Management
Operating expense
Total income
Segment result
Assets under Management
– of which PAM
– of which TPAM
FY 2009
-180
257
77
116 411
106 535
9 876
FY 2008
-179
273
94
111 519
102 149
9 370
Change
1%
-6%
-18%
4%
4%
5%
Mainly due to transfer of fund mandate of Banca del Gottardo by end 2008
Efficiency improvements offset by investments in a new asset management infrastructure
Increase of insurance assets mainly due to positive performance
Average assets under Management
113 965115 724 -2%
Growth of third party assets mainly due to asset inflow
Full-year results 2009: Investors' Presentation 13
AWD Group, stand-alone, EUR million (IFRS basis)
Business review AWD
Revenues
FY 2009
528.7
FY 2008
633.0
Change
-16%GermanyAustria & CEEUnited KingdomSwitzerland
EBITGermanyAustria & CEEUnited KingdomSwitzerlandHolding
Financial advisors 1)
Advised customers 1)
344.268.443.073.1
28.8-42.3
1.26.2
-35.0
385.6114.563.669.3
72.34.2
-24.95.3
-37.2
-41.119.7
5 3425 937
436 380423 188
1) Figures excl. CRO and ROM
n.a.
-10%
+3%
Driven mainly by repositioning of Austria and UK. Revenues with unit-linked products and investment funds declined while pension solutions and non-life products increased
Positive EBIT of EUR 12.6 m excluding one-offs and restructuring costs
Higher qualifications in line with stricter regulatory requirementsIncreased advisor activity
Full-year results 2009: Investors' Presentation 14
One-off and restructuring costs in AWD 2009 resultFY 2009, EUR million
Change of claim and
other effects
Holding downsizing/
increase admin efficiency in
Germany
Total one-off and restructuring
costs FY2009
Repositioning AWD AT &AWD CEE
Severance payments
~5%
~15%
~15%
~54 ~65%
Full-year results 2009: Investors' Presentation 15
EUR million
Underlying operating profit of AWD, excluding one-off and restructuring costs
Q1 2009
-6.0
H1 2009
-10.3
9m 2009
-19.4
EBIT, including one-off and restructuring costs
FY 2009
-41.1
12.6
3.5
-2.7-3.5
Full-year results 2009: Investors' Presentation 16
FY 2008 FY 2009
CHF million (IFRS basis)
Expense development
Operating expense adjusted I
Operating expense adjusted II
Currency effect
Restructuring costs and one-offs 2009
Operating expense
Restructuring costs 2008
-6% / -122
Change
-7% / -139
-10% / -193
AWD Q1 2008 86
1 891
-54
-57
2 002
1 945
1 880
Total operating expense +5% / +1593 319 3 478
Commission and DAC amortisation -1 403 -1 598
1 752
1 752
-128
Full-year results 2009: Investors' Presentation 17
CHF million (IFRS basis) – insurance portfolio for own risk
Investment result
110 089
1 591
110 591Average net investments
0.5% 5.4%Total investment result in %
571 5 921Total investment result
282Changes in net unrealised gains/losses on investments
0.3% 3.9%Net investment result in %
289 4 330Net investment result
-4 036 357Net capital gains/losses on investments and impairments
-184 -191Expense
FY 2008 1) FY 2009
-0.7% 7.5%Total investment performance (fair value) in %
1) Previously reported figures included intercompany loans on demand and SL Gestion
4 509 4 164Direct investment income
Direct investment income in % 3.8%4.1%
Full-year results 2009: Investors' Presentation 18
Loans
Equities & equity fundsAlternative investmentsReal estateMortgages
Corporates
Cash and other31.12.08
106 327
6.3%
29.4%
2.2%
11.9%5.3%
12.6%
CHF million (fair value basis) insurance portfolio for own risk
Net equity exposure 0.8%
3.1%
Investment portfolio
Governments & Supranationals
28.7%
Others 1) 0.5%
1) Exposure to CDO/CLO, ABS, MBS, etc.
58.6%
31.12.09
112 611
1.7%
4.8%
34.0%
11.8%4.9%
3.4%
10.8%
28.4%
0.2%
1.8%
62.6%
Full-year results 2009: Investors' Presentation 19
CHF million (IFRS basis)
Insurance reserves and borrowings
31.12.2008
9 727 15 101
-13%3 123 2 731
1 422 3 109
11 135 12 089
91 024 92 317
+ 8%113 308 122 616
31.12.2009 Change
Financial liabilities FVPL (unit-linked)
Borrowings
Policyholder participation liabilities
Investment contracts
Insurance liabilities
Insurance reserves
Full-year results 2009: Investors' Presentation 20
CHF million (IFRS basis)
31.12.2008 Change in unrealised
gains/losses
Change in share capital
treasury shares and share premium
Profit attributable to shareholders
31.12.2009Change inFX translation
Par value reduction (dividend)
Development of shareholders' equity
-21
4047 208
6 609
27898
-160
+9%
Full-year results 2009: Investors' Presentation 21
Based on IFRS equity
31.12.2008
158%
164%
31.12.2009
-2%
Result Change in revaluation
reserves and other effects
Proposeddividend
+2%+6%
Group solvency
Full-year results 2009: Investors' Presentation 22
Group MCEV
2 7452 753
2 3241 971
1 8081 597
FY 2008 FY 2009
Total change: CHF 556 m, +9%
Change in value of covered business: CHF 564 m, +16%
Capital outflow: CHF 161 m
Economic recovery is main driver for changes in NAV and VIF
Value of non-covered business remains almost unchanged
MCEV per share 2): CHF 216 (from CHF 207 as of 31.12.2008)
+13%
6 8776 321
+18%
-0%
1) The non-covered business consists mainly of SL Holding, AWD, Payment Protection Insurance and SL Products2) Based on 31.8 m shares outstanding (as of 31.12.2009), and 30.5 m shares outstanding (as of 31.12.2008)
Non-covered business 1)
Net asset value
VIF
CHF million
Full-year results 2009: Investors' Presentation 23
MCEV – Covered business: Analysis of earnings for 2009
3 569 -1123
568 -198
71
ClosingClosing adjustments
Non- operating earnings
Other operating earnings
VNBOpening adjustments
Opening
4 132
Value of covered business increased by 16%
Earnings of covered business (net of opening and closing adjustments): CHF 762 m or 21% of opening MCEV– Operating earnings (VNB and other operating earnings): CHF 194 m– Non-operating earnings (CHF 568 m) include economic variances of CHF 581 m
CHF million
Full-year results 2009: Investors' Presentation 24
Margin management focus: VNB and NBMDrive shift to modern products & promote risk products
Optimise distribution channel mixCapture full potential of AWD
Plan with clear accountabilities to achieve 2012 cost targetEliminate negative cost result and move to continuous improvement
Initiatives to optimise profit stream from in-force business and risk capital usage
Update on MILESTONE programme
Enhance customer value & new business profitability
Increase distribution quality and power
Improve operational efficiency
Strengthen the balance sheet
Objectives
1
2
3
4
“We are growing – but not at the expense of value”
“We are increasing growth in 3rd party channels and AWD”
“We are managing our cost base rigorously and continuously”
“We are actively managing our capital and in-force business”
5Drive disciplined execution
MILESTONE
Full-year results 2009: Investors' Presentation 25
Margin management contribution to be further enforced
New business margin development (VNB as % of PVNBP)
2.2%
0.9%
FY 2008
1.1% 1)
1) Liquidity premium of 65bp in Switzerland and 50bp in euro zone
10.9 14.4PVNBP (CHF bn)
119 123VNB (CHF m)
A 20 bps liquidity premium would increase the new business margin in 2009 by 15 bps
Strong growth of new business (PVNBP) without compromising margin
Margin improvement in 2010 under way– Revision of current terms– Sales stimulation activities for low margin
products discontinued– Mid-term replacement of low margin
products
Cost savings to be realised in 2010 will further improve new business margin
FY 2009 2012 P
1. New business profitability
Full-year results 2009: Investors' Presentation 26
Shift to modern and risk products on track
New business mix (based on NBP 1))
Modern & risk products 2)
Traditionalproducts
FY 2008
1) New business production (single premium plus periodic premium times duration)2) Modern and risk products, incl. health
Product transformation plans and tracking in place
Attractive new products supporting the shift to modern and risk: – CH: Champion Duo– FR: SL Objectif (structured products)– DE: Re-positioning of risk products
Growth of PPLI further contributed to shift
FY 2009 2012 P
1. New business profitability
> 70%
< 30%
64%
36%
54%
46%
Full-year results 2009: Investors' Presentation 27
Distribution initiatives to increase distribution quality and power are on track
Increase productivity of tied agent forceLeverage successful partnership with AWDBuild stronger footprint in broker channel
Improve efficiency of proprietary channelsGrow in 3rd party channelsPosition Swiss Life as preferred provider for private banks
Implement banking channel and develop affluent brokersIntensify existing partners’ capacitiesLeverage successful partnership with AWD
Enter strategic cooperation with brokersRecruit experienced professionals to grow volumes across main European markets
As announced on Investors’ Day 2009 Current statusFive point programme to boost tied agent’s productivity startedInitiatives to improve service levels, intensify and standardise broker/AWD care launched
Efficiency measures started Increase in new business of 3rd party channels achieved in 2009Good leads for 2010 in the banking channel
Banking team acquired and key account management set up VIP services for brokers definedInitiative launched to continue growth through AWD, such as advisor training
PPLI: Close cooperation with master broker in LATAM reinforced PPLI: Experienced sales professionals hired, already good production achieved in 2009 Corporate Solutions: 18 new global clients acquired thanks to strict global client relationship management
2. Distribution
Full-year results 2009: Investors' Presentation 28
Successful partnership with AWD shows strong increase in new business production
FY 2008FY 2007 FY 2009
Swiss Life in GermanyNBP 1) in EUR million
+108%
Swiss Life in Switzerland
FY 2007 FY 2008 FY 2009
NBP 1) in CHF million
+918%
Target 201220 - 25% share of Swiss Life products in relevant product categories of AWD
2. Distribution
1) New business production
380
18382
112
110
Full-year results 2009: Investors' Presentation 29
50% of the cost savings initiatives fully implementedStatus of cost savings initiatives 2009 – 2012 by YE 2009
Major achievements
• Over 300 efficiency initiatives defined out of a total of 500 MILESTONE initiatives• Cumulative restructuring charges of CHF 148 m by end of 2009
Corporate Center
Implemented cost savings
AWD
Switzerland
Cost savings target 2012 vs.
2008 basis
Planned cost
savings
Cost savings in
implementation
~50% ~40% ~10%
3. Operational efficiency
Full-year results 2009: Investors' Presentation 30
Reduced guaranteed interest rate on non-mandatory part to 1.5%
Stop reinvestment possibilities at old conditions
Swiss Life launched several initiatives to strengthen its balance sheet in 2009
Release risk capital and optimise profit streams
Increase profit
Levers to manage value of in-force business
Reduce guaranteed interest rate dependency in Group Life businessOptimise risk capital consumption Align tariffs for policy changes
Switzer- land
PrévoyanceCantonnementActive shift to unit-linkedpolicies
France
Optimise legal structureAlign reinsuranceManage lapses
Germany
Selected initiatives per country Activities 2009
Cost result
Risk result
Interest rates
Other effects
4. Balance sheet
Dividend pay out ratio of 28%Group
Developed risk capital preserving product line for semi-autonomous pension fund solutions, launch foreseen in April 2010
Full-year results 2009: Investors' Presentation 31
Margin management
Shift to modern & risk products
Multi-channel
Reduced cost base
Improved solvency
MILESTONE is well underway
Enhance customer value & new business profitability
Increase distribution quality and power
Improve operational efficiency
Strengthen the balance sheet
1
2
3
4
5Drive disciplined execution
MILESTONE
5. Disciplined execution
Full-year results 2009: Investors' Presentation 32
Agenda
Overview Bruno Pfister
Financial results and Thomas Buess MILESTONE update
Outlook Bruno Pfister
Full-year results 2009: Investors' Presentation 33
Wrap-up
Significantly improved net result from continuing operations
Good premium growth achieved with lower operating expenses
Strong net investment result despite stable risk appetite
Improved IFRS equity and Group solvency
Full-year results 2009: Investors' Presentation 34
New business margin > 2.2%> 70% of NBP from non-traditional and risk products
20–25% share of Swiss Life products in relevant product categories of AWD
CHF 350–400 m reduced cost base vs 2008
RoE 10–12%Dividend payout ratio 20–40%
2012 Targets confirmed
Enhance customer value & new business profitability
Increase distribution quality and power
Improve operational efficiency
Strengthen the balance sheet
Objectives
1
2
3
4
MILESTONE
Drive disciplined executionReporting on achievements, challenges, and actions on ongoing basis
5
Full-year results 2009 Investors’ Presentation Supplementary information
Full-year results 2009: Investors' Presentation 36
Supplementary information
Profit and lossBalance sheet
Investments
Market consistent embedded value (MCEV)
Contact details and financial calendar
Full-year results 2009: Investors' Presentation 37
Premium growthGWP & PHD; CHF million (IFRS basis)
1)
1) Includes Private Placement Life Insurance (PPLI), Corporate Solutions, Swiss Life Products and Payment Protection Insurance (PPI)2) Total includes intersegment eliminations of CHF -28 m in FY09 and CHF -36 m in FY08
+9% +12%
-8% -8%
-8% -3%
+10% +15%
+99% +100%
Local currency
2)
FY 2009 FY 2008
18 515
2 639
1 977
5 763
8 172
20 219
5 263
2 169
5 297
7 518
Total
Other
Germany
France
Switzerland
Full-year results 2009: Investors' Presentation 38
FY 2008 FY 2009 Change
Total life GWP incl. PHD 8 172 7 518 -8%
Single premiums 4 342 3 798 -13%
Periodic premiums 3 763 3 654 -3%
Reinsurance premiums assumed 67 66 -1%
Group life 6 476 5 788 -11%
Single premiums 3 690 3 102 -16%
Periodic premiums 2 786 2 686 -4%
Individual life 1 696 1 730 2%
Single premiums 652 696 7%
Periodic premiums 1 044 1 034 -1%
Switzerland: Life insurance premiums CHF million (IFRS basis)
Full-year results 2009: Investors' Presentation 39
Total insurance benefits paid (incl. bonuses)
Operating income total group business
CHF million (statutory basis)
Gross revenue
Operating income BVG business
Operating income other group business
Switzerland: statutory distribution ratio in BVG business
>100%
505
-948
-135
-1 083
FY 2008
1 442
100%
92.0%
2 086
1 919
167
25
192
FY 2006
100%
92.1%
2 192
173
33
206
FY 2009
2 019
100%
91.5%
2 065
1 890
175
37
212
FY 2007
100%
175
Full-year results 2009: Investors' Presentation 40
CHF million (IFRS basis) – insurance portfolio for own risk FY 2009
Details of net investment result
Direct investment
income
Impair- ments
on underlying
on derivatives Net
Bonds 2 810 -74 -166 216 50 2 786Equities 69 -63 417 -300 117 123Loans 511 2 106 106 619Mortgages 195 1 -3 -3 193Alternative investments 0 -108 163 -62 101 -7Real estate 565 0 185 185 750
Cash & other 14 -1 44 44 57
Total 4 164 -243 746 -146 600 4 521Expense -191
Net investment result 4 330
Net investment
result
357
Net capital gains/ losses on investments
Gains & losses through income statement
Full-year results 2009: Investors' Presentation 41
Segment results; CHF million (IFRS basis)
- Switzerland675
FY 2009
515
-70
-28-47
562
159467
92-4377
-9294
-715FY 2008
-55
861
-116
-842
1 694-41
-7484029
-36
- France- Germany- Other
Investment Management
Insurance (Continuing)
Other & eliminations
Result from operations
Unallocated corporate costs
AWDInsurance & Banking (Discontinued)
of which continuing
of which
Operating result
Full-year results 2009: Investors' Presentation 42
CHF million (IFRS basis), AWD stand-alone
Reconciliation AWD segment result to AWD EBIT
1) EBIT AWD FY 2009: EUR -41.1 m
AWD segment
result FY 2009
Amortisation customer
relationship asset
EBIT AWD FY 2009 1)
+27-92
+3 -62
Financial result AWD
FY 2009
Full-year results 2009: Investors' Presentation 43
Supplementary information
Profit and loss
Balance sheetInvestments
Market consistent embedded value (MCEV)
Contact details and financial calendar
Full-year results 2009: Investors' Presentation 44
CHF million (IFRS basis)
-10-42
-56
1280
Unrealised gains/losses
on bonds
Deferredpolicyholder
bonuses
ShadowDAC
adjustment
Deferred taxes
Non-controlling interests
Allocated to shareholders’
equity
236
Allocation of unrealised gains/losses on bonds
Full-year results 2009: Investors' Presentation 45
CHF million (IFRS basis) – comparable basis 1)
Total
Germany
France
Switzerland64 462
65 406
Switzerland53%
France19%
Germany16%
31.12.2009 31.12.2008
1) Total includes intersegment eliminations of CHF -96 m in 2009 and CHF -69 m in 20082) PPLI, Corporate Solutions, Swiss Life Products, Payment Protection Insurance
Other 2)
20 716
23 003
19 098
19 924
9 101
14 379
113 308122 616
+8%
+58%
+4%
+11%
+1%
Other12%
Insurance reserves by country
+8%
+58%
+5%
+12%
+1%
Local currency
Full-year results 2009: Investors' Presentation 46
Breakdown of insurance reserves (incl. unit-linked) as per 31.12.2009;CHF billion (IFRS basis)
Investment contracts & PH deposits
Non-life (1 billion)
Mandatory
Non-mandatory
Guaranteed rates (from 1 Jan 2010)
1.50%
2.00%
Swiss Life Group reserves subject to BVG minimum interest rates
Converted17.6
Notconverted
24.0
CH62
Europe 26
Individual20.1
Group41.6
34
Traditional business
88
Continuingoperations
123
11.1
12.9
Full-year results 2009: Investors' Presentation 47
CHF / EUR / USD / GBP million (statutory basis)
CHF EUR USD GBP
Overall: 2.60%(01.01.2009: 2.66%)
Total reserves 62 647 23 486 98 8
Average technicalinterest rate
2.46% 1) 2.86% 3.93% 3.59%
1) Already taking into account the guaranteed interest rate for non-mandatory group life business as from 2010 (1.5%)
Average technical interest rate of 2.60%
Full-year results 2009: Investors' Presentation 48
01.01.04 01.01.05 01.01.06 01.01.07 01.01.08 01.01.09 01.01.10
3.14%3.03%
2.90%
2.66%
3.00%
Development of business -8 bpsChange guaranteed rate ofCH group life -16 bps
Sale of ERISA, NL, BE -9 bpsDevelopment of business -4 bpsChange guaranteed rate of CH group life +3 bps
Development of average technical interest rate
2.60%
3.20%
Development of business -3 bpsChange guaranteed rate of CH group life 1) -3 bps
1) Guaranteed interest rate for non-mandatory group life business as from 2010: 1.50%
Full-year results 2009: Investors' Presentation 49
in %
30 June 2008 31 Dec 2008
1) Explains the change in economic net worth due to a parallel shift of the underlying interest rate curve in percentage of the present value of the liabilities2) Restatement due to bi-annual full liability projection
31 Dec 2007
Total weighted duration gap 1)
30 June 2009 2) 31 Dec 2009(Estimate)
0.7
0.9
0.7
0.9
0.6
Full-year results 2009: Investors' Presentation 50
Solvency IParent company (statutory)
Solvency ISwiss Life Group (IFRS)
SST Parent company and Swiss Life Group (market consistent)
S&P capital adequacy Swiss Life Group (IFRS)
Required capital
Shareholders’ equity includes:
Additional elements included 1):
Factor based 2)
Stochastic 3)
Factor based 3)
No revaluation reserves on assets
Shareholder part of revaluation reserves
Revaluation reserves on all assets and liabilities
+ Revaluation reserves on assets (excl. bonds)
+ Fund for future appropriation+ Additional Zillmerisation
+ Minority interest- DAC non-life
+ Fund for future appropriation
Factor Based 2)
Available capital
+ 50% present value of future profits - Unrealised gains on bonds+ Unrealised losses on bonds
Shareholder part of revaluation reserves
1) All metrics include: + Eligible part of hybrid capital, + free part of PH dividend reserve, - intangible assets & dividend2) Only liability risks considered3) Asset and liability risks considered
Capitalisation models, methods and scope
Full-year results 2009: Investors' Presentation 51
CHF million (IFRS basis)
Group solvency
1) Limited to 50% of the required solvency margin
31.12.2008 31.12.2009
Available solvency margin
IFRS equity (incl. minority interests) 6 652 7 245
Eligible part of hybrid capital 1) 2 323 2 339
Unattributed surplus 811 656
Goodwill and other intangible assets -2 205 -2 238
DAC non-life -55 -57
Dividends and par value reduction -152 -80
Tax losses -14 -41
Total available solvency margin 7 360 7 824
Total required solvency margin 4 646 4 782
Solvency ratio 158% 164%
Full-year results 2009: Investors' Presentation 52
CHF million (statutory basis)
Available solvencymargin
Required solvencymargin
Available solvency margin Statutory solvency
Parent company statutory equity 1 879
Intangibles -8
Eligible part of hybrid capital 1) 1 738
Fund for future appropriation 149
Additional Zillmerisation 256
Unrealised capital gains 2 033
Unattributed surplus 548
Available solvency margin 6 595
190%6 595
3 476
Statutory solvency at 190%
1) Limited to 50% of the required solvency margin
Full-year results 2009: Investors' Presentation 53
Supplementary information
Profit and loss
Balance sheet
InvestmentsMarket consistent embedded value (MCEV)
Contact details and financial calendar
Full-year results 2009: Investors' Presentation 54
Insurance portfolio (fair value basis)Breakdown by rating
BBB14%
AAA48%
AA13%
A21%
62.6%
CHF million 112 611
Below BBB4%
Breakdown by classification
Corporate 55%
Government and supranationals45%
Bond portfolio: Ratings and classification
Bonds
Full-year results 2009: Investors' Presentation 55
Insurance portfolio (fair value basis)
CHF41%
EUR56%
USD3%
Government and supranational bond portfolio: Ratings and currency
Government and supra- nationals
28.4%
CHF million 112 611
BBB5%
AAA79%
AA10%
A5%
Below BBB1%
Breakdown by rating
Breakdown by currency
Exposures to sovereigns under observation(28.02.2010)- Portugal: CHF 170 m - Greece: CHF 335 m- Italy: CHF 683 m - Spain: CHF 291 m- Ireland: CHF 429 m - Total: CHF 1 908 m
Full-year results 2009: Investors' Presentation 56
Breakdown by rating
BBB22%
AAA19%
AA16%
A35%
xx%
Below BBB8%
Corporate bond portfolio: Ratings and currency
EUR61%
Corporate bonds
CHF million 112 611
34.0%
CHF14%
Others1%
USD24%
Insurance portfolio (fair value basis)
Breakdown by currency
Full-year results 2009: Investors' Presentation 57
xx%
Corporate bond portfolio: Details on “available for sale” and “loans” classifications
Corporate bonds
CHF million 112 611
34.0%
Insurance portfolio (fair value basis)
Available for sale (Duration 6.8)
IFRS Book Value: CHF 21 501 million
Fair Value: CHF 21 501 million of which Tier 1-Bank Bonds: CHF 222 million (1.0%)
Loans and reclassified bonds (Duration: 6.3)
IFRS Book Value: CHF 13 149 million
Fair Value: CHF 13 849 million of which Tier 1-Bank Bonds: CHF 627 million (4.5%)
Full-year results 2009: Investors' Presentation 58
Policyholder loans 3%
Mortgages 32%
Other loans 5%
Mortgages Loans
France 1%
10.8%
CHF million 112 611
Breakdown by country
Breakdown by type
Germany 68%
Switzerland31%
Loan and mortgage portfolio
4.9%15.7%
Purchased loans 60%
Insurance portfolio (fair value basis)
Full-year results 2009: Investors' Presentation 59
Breakdown by country
Breakdown by type
France 11%
Germany 6%
Switzerland83%
Residential 42%
Commercial 24%
Mixed23%
Others 2%
11.8%Real estate
CHF million 112 611
Centres 9%
Real estate portfolioInsurance portfolio (fair value basis)
Full-year results 2009: Investors' Presentation 60
Equities & equity funds 3.4%
CHF million 112 611
Equity portfolio: Gross exposure
Breakdown by country
Switzerland 46%
France21%
Germany33%
Insurance portfolio (fair value basis)
Full-year results 2009: Investors' Presentation 61
Alternative investments 1.7%
Private equity: CHF 305 million (2008: CHF 234 million)
Fund of funds 69%
Single funds 31%
Others 21%
Hedge funds: CHF 1.7 billion(2008: CHF 3.0 billion)
Tactical trading 14%
Equity hedged9% Relative value
32%Event driven 21%
CHF million 112 611
Alternative investment portfolio
Commodities related strategies 3%
Insurance portfolio (fair value basis)
Full-year results 2009: Investors' Presentation 62
CHF million (fair value basis)
+150
-1338
1 657
2 999
31.12.08 Realised/ unrealised
gains/losses
FX gains & losses
31.12.09Cash redemptions
-71-83
Impairments
Hedge funds movements
Full-year results 2009: Investors' Presentation 63
Foreign currency exchange rates
1) 10-year government bond
1.0608 1.03001.0799USD
1.5413 1.66391.7927GBP
1.4915 1.48371.5255EUR
31.12.08 31.12.0930.06.09
1.0857
1.6958
1.5102
3.020 4.0153.690GBP
2.212 3.8373.533USD
2.951 3.3873.386EUR
2.095 1.9012.319CHF
31.12.08 31.12.0930.06.09
Interest rates 1)
1.0831
2.0006
1.5874
01.01.-31.12.08
Forex and interest rates
01.01.-31.12.09
Full-year results 2009: Investors' Presentation 64
Supplementary information
Profit and loss
Balance sheet
Investments
Market consistent embedded value (MCEV)Contact details and financial calendar
Full-year results 2009: Investors' Presentation 65
CHF millionGermanyFrance Switzerland TotalInsurance
Other 1)
Value of new business
New business margin (% PVNBP)
11
43
21
PVNBP
48
FY 2009FY 2008
1212
4748
123119
3 824 3 396 1 5871 356 4 7551 987 14 39010 935
0.91.11.2 0.3
4 6523 767
0.91.3 1.30.9 1.00.6
65
1) Includes only PPLI and Corporate Solutions
Full-year results 2009: Investors' Presentation 66
Value of New Business
Switzerland France Germany Other Total
Value of new business 11 43 21 48 123
New business strain -55 -54 -9 -15 -133
VNB before new business strain 65 96 30 63 255
Annual premiums 161 360 154 3 678
Single premiums 1 352 1 867 193 4 734 8 146
Present value of new premiums (PVNBP) 3 396 4 652 1 587 4 755 14 390
Average annual premium multiplier 12.7 7.7 9.1 6.2 9.2
New business annual premium equivalent (APE)change to FY 2008
296
+13%
547
+8%
173
+13%
477
+140%
1 493
+33%
New business margin (% PVNBP)change to FY 2008
0.3% -94 bps
0.9% -34 bps
1.3% +45 bps
1.0% +43 bps
0.9% -24 bps
New business margin (% APE)change to FY 2008
3.6% -1460 bps
7.8% -160 bps
12.2% +430 bps
10.1% +430 bps
8.2% -240 bps
CHF million (MCEV)
Full-year results 2009: Investors' Presentation 67
Economic assumptions
Swap rates Forward inflation ratesEconomy 1 year 2 year 5 year 10 year 15 year 30 year Year 1 Year 2 Year 5 Year 10 Year 15 Year 30Switzerland 0.49% 0.87% 1.71% 2.50% 2.85% 2.83% 0.6% 0.6% 1.0% 1.9% 2.2% 1.6%Euro zone 1.31% 1.88% 2.81% 3.59% 3.96% 3.94% 1.7% 2.0% 2.1% 2.8% 3.2% 2.5%USA 0.66% 1.43% 2.98% 3.97% 4.36% 4.53%
Swaption implied volatilities (tenor: 20 years for EUR and USD, 10 years for CHF)
Economy 1 year option
2 year option
5 year option
10 year option
15 year option
30 year option
Switzerland 27.4% 25.1% 21.7% 19.9% n/a n/aEuro zone 21.0% 20.5% 17.4% 15.6% 16.2% 16.5%USA 25.9% 24.7% 20.6% 16.3% 14.3% 12.5%
Equity option implied volatilitiesEconomy Index VolatilitySwitzerland SMI 23.7%Euro zone Eurostoxx 28.6%USA S&P 500 29.0%
Real estate volatilitiesEconomy VolatilitySwitzerland 10.0%Euro zone 15.0%
Full-year results 2009: Investors' Presentation 68
Cautionary statement regarding forward-looking information
This presentation is made by Swiss Life and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Swiss Life. Although all reasonable effort has been made to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Swiss Life. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Swiss Life as being accurate. Neither Swiss Life nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained herein are as up to date as is reasonably possible and may be subject to revision in the future. Neither Swiss Life nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Swiss Life nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. This presentation may contain projections or other forward-looking statements related to Swiss Life that involve risks and uncertainties. Readers are cautioned that these statements are only projections and may differ materially from actual future results or events. All forward-looking statements are based on information available to Swiss Life on the date of its posting and Swiss Life assumes no obligation to update such statements unless otherwise required by applicable law. This presentation does not constitute an offer or invitation to subscribe for, or purchase, any shares of Swiss Life.
Full-year results 2009: Investors' Presentation 69
Supplementary information
Profit and loss
Balance sheet
Investments
Market consistent embedded value (MCEV)
Contact details and financial calendar
Full-year results 2009: Investors' Presentation 70
Contact details and financial calendarContact
Robert Moser Phone +41 (43) 284 67 67Head of Investor Relations E-mail [email protected]
Rolf Winter Phone +41 (43) 284 49 19Senior Investor Relations Manager E-mail [email protected]
Financial calendar
Interim statement Q1 4 May 2010Annual General Meeting 2010 6 May 2010Half-year Results 2010 18 August 2010Interim statement Q3 10 November 2010
Visit our website for up-to-date informationwww.swisslife.com
Full-year results 2009: Investors' Presentation 71Presentation, Place, Date 71
The future starts here.